China’s Economy Stepping into a Downward Spiral with Two Major Risks: Analysis

News Analysis
China’s economy is moving into a downward spiral in the medium-to-long term due to demographic headwinds and declining productivity after it slowed down substantially in 2022 with GDP growth reaching its second lowest since 1977.
The International Monetary Fund (IMF), although expecting China’s economy to rebound in the short term, revised its medium-term growth forecast on Feb. 3, with the GDP growth being depreciated to 3.8 percent in 2027, compared to its previous projection of 4.6 percent. Such a downward trend will be expected to remain in 2025–2027, reflecting the persistent economic challenges in China.
The Asian Development Bank (ADB) made a longer-term forecast in its report published (pdf) in December 2022, predicting a gradual decline in China’s economic growth from an average of 5.3 percent in 2020–2025 to an average of 2 percent in 2036–2040….

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